The U.S. economy added a somewhat disappointing 169,000 new jobs in August, according to preliminary data from the U.S. Department of Labor. However, the official unemployment rate fell to 7.3%. It was 7.4% the previous month.
The preliminary numbers for August were slightly below a key forecast. Earlier in the week, economists surveyed by Dow Jones Newswires had forecast 173,000 new jobs, with the unemployment rate holding at 7.4%.
At this point, it’s unclear how the August employment data will impact the Federal Reserve Board’s decision-making. Fed Chairman Ben Bernanke says he wants to start winding down the Fed’s stimulus programs by year’s end. Solid monthly employment reports would give the Fed, which meets in mid-month, the impetus to credibly unwind its “easy money” policies.
Economists say the U.S. economy must create at least 150,000 new jobs each month just to keep up with changes in population and the labor market, and it must create about 250,000 new jobs to quickly bring down the unemployment rate. Through the first seven months of 2013, the economy had created an average of 192,000 jobs per month, an improvement on the average of 183,000 new jobs per month in 2012.
However, the government lowered its preliminary estimate for combined job gains in June and July by 74,000. The revised August figure now is pegged at 104,000 new jobs, down from the 162,000 originally forecast.
Also in August, the official unemployment rate dropped by one-tenth of a point, but that could be due to another drop in the labor force participation rate, which now stands at a 35-year low of 63.2%.
Private companies added 152,000 jobs in August, led by the retail and the leisure and hospitality sectors, while government employment rose by 17,000. August job gains were led by the 44,000 new jobs in retail as that sector prepared for back-to-school sales, and the 27,000 new jobs added in leisure and hospitality to accommodate the summer vacation season.
